Barky's Day Trading Rules

DTF Based Rules for a Systemised Approach

It is fairly easy to learn an entry model and use it to scalp for living. All you need is 10 to 20 points, and your day is made. When I went through the discovery stage of my system, I was a complete beginner. Like anyone out there, trading psychology hit my by complete surprise, and it took me a lot of time to work through.

When you work your way through my articles, instructions and courses, you are learning about price action. In the end, the challenge will be to use what you have learned, the parts of it that you truly understand, and apply it to live price action in anticipation of a setup, so that you can compound gains, make a living.

For the vast majority of traders, discipline is a big problem. Once you have a basic understanding of the concepts and models, you will suddenly be tempted to confuse price action with a setup model.

The thing with price action is that the movements are always logical. With your understanding, you will see that price is moving from liquidity pool to liquidity pool, and you will always feel that you missed out when you don’t participate, and this is simply because you recognise what price is doing.

Your Job Description

Your job is to isolate contractions. Setups that allow you to define risk and potential reward. You have to be able to look at price action and say one of three things:

• Solid price action, too bad they didn’t give me a setup;

• Solid price action, too bad I missed that nice entry setup down there;

• Price is setting up my model, so I have plan this trade.

You will only prepare to trade in one of these three situations. Anything else means your job is to wait.

Then when you do get an entry, your job is to hit the entry immediately when it triggers. Hesitation is fear of uncertainty and skews risk/reward. There is no question. If your model sets up, you HAVE to take the entry immediately when it triggers, and then risk 1R, and wait to see what the market gives you.

Discipline is Key - Avoid Going Full Tilt

The biggest problem for beginners, is the focus on the money. Losing is killing, but you can’t engage the markets without taking losses. You have to set rules for yourself. You are no exception if you go tilt when you take a loss. You have to be able to walk away - and I know how tough that is.

The process that leads you to go tilt starts with the inability to wait for a setup model that you understand. Let that sink in. Your job is to wait for a contraction to define risk, and then take the trade if it sets up and triggers.

Once you are in a trade, the rules say to wait for 1R for partials, then scalp or swing runners. The same fear of uncertainty that causes you to hesitate during entries will lead you to take partials too soon. If you are scared, you will end up entering late and exiting early. You can never become successful this way.

• You have to trust the system and ignore your emotions;

• You have to wait for your setup model;

• You have to execute in line with the parameters;

• You take the wins, and you take the losses.

If you follow the rules, your wins will make 1R or more and your losses will lose 1R, no more. Over time, your account grows.

Now, this is the only way to achieve that. The problem is, when you start out, you will make mistakes. While you are solving your psychology, you will get it wrong. If you consistently enter too early, or if you consistently enter too late, or break system rules elsewhere - either because you are inexperienced and practising, or because you lack discipline, you will lock yourself in break-even prison.

Break-even is a good state to be in. You are practising, you are learning. You have to journal, reflect, and understand where your issues are. Is it in the entry, is it in the waiting, is it that you engage because you talk to the chart (and don’t wait for a solid setup), whatever it is, you have to accept that you won’t achieve consistent profitability before you solve these issues.

I can tell you from experience, that if you only wait for the high probability entry models to set up, you will take only one or two trades per day, and if you have a full time job, you will miss most of them. You’ll have to accept that. All I can tell you is that waiting for the high probability model and then scalping for 1R, 2R, this will grow you account and your confidence.

I can also tell you from experience, that when you are locked in break even prison, you will end up getting it wrong, and out of frustration you will move your stop loss and give the trade space. Why would you move your stop loss? Because subconsciously, the stop is the bad guy. The stop takes your money, the stop triggers another failure, removing the stop is the cure.

The second you move your stop, you are doomed.

What is the solution?

Zoom out, take a break, did you wait for your setup? Are you supposed to be engaging at all? After all, if you had a proper setup, your trade would be working by now.

Reasons to Break the Rules

There are no reasons to break the rules. The rules are there so that you can make money and experience success. You break a rule when you make a mistake. Your job is to wait for a setup. If you make a mistake, you take the loss. You don’t chase, you don’t immediately enter again unless price is triggering the actual entry. If you don’t know what you are looking at, you should simply do nothing.

Discipline is what sets the 1% apart from the 99%.

Let that sink in. You are alone. You have to convince you to execute in line with the parameters. Nobody else can tell you to follow the rules.

So that leads us to rules. I have designed a set of rules that tells me that I can patiently wait for a setup here and there, or if it is time to really commit and trade, trade, trade.

In a bid to help you change your life as well, here is the rules set that I compiled with the concepts and models that I have discovered and designed.

So here it is, my complete rules set for trending market versus basing market, how to spot it, where and why the buy signals form, and primarily, when to engage, when to swing, when to scalp, and even more important: when NOT to engage at all.